The Securities Board of Nepal (SEBON) is preparing to set in place a new set of guidelines intended to raise the chances of small investors to get shares during initial public offerings (IPOs).
The guidelines are directed at removing the existing loopholes that allow players to submit large numbers of share applications with counterfeit paperwork to back them up. This illegal practice has been making it difficult for genuine and small investors to buy shares during IPOs.
The Registration and Issue Guidelines make it mandatory for all prospective investors in an IPO to open a bank account to receive refunds of their money after the allotment of shares.
Presently, the issue manager makes refunds in cash. This has induced prospective investors to apply for shares in the names of hundreds of acquaintances using their citizenship certificates to increase their chances of getting a higher allocation of shares. A SEBON official says once the guidelines go into effect, such investors will not be able to make use of their usual tricks.
“The guidelines are awaiting endorsement by the Ministry of Finance before they can be enforced,” said SEBON chairman Dr Chiranjiwi Nepal.
Once the new regulations are put in force, companies can issue shares at a premium price. As of now, they are required to make IPOs at face value, which is normally set at Rs 100 a unit. “We have allowed the companies to set the premium price as high as 2.5 times the book value,” said Nepal.
He said the guidelines would also require companies to publish a more detailed and informative prospectus to provide clear information to aspirant investors. “Apart from SEBON, they must forward the prospectus to the stock exchange,” he added.
Moreover, there is a provision in the guidelines requiring the issue manager to keep the applicants' money with the Nepal Rastra Bank for at least three days after the IPO has closed. “This is to discourage the practice of applying for shares using 'paper' money,” said Nepal.
The stock regulatory body has recently issued a four-point set of directives to issue and sale managers to address shortcomings in the IPO process. It requires issue managers to pay interest on the money investors deposit with their share applications.
Meanwhile, SEBON is going to set up a securities data management system (SDMS) which will maintain profiles of the companies and their promoters and data about merchant banking and intermediaries. Nepal said the SDMS was being established with a Rs 6.2 million assistance from the World Bank. “This is aimed at providing complete information to investors to allow them to make informed decisions about shares,” he added
The move also opens the possibility for online application of shares during IPOs, which will eventually shorten the allocation period, he said.
Source: eKantipur
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"Gorkha Finance Limited (Bittiya Sanstha)" has changed its name to "Gorkha Finance Limited".
Source: Jamb News Service
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The initial public offering (IPO) issued by Nepal Development and Employnment Promotion Bank (NDEP) worth 1280000 shares amounted to Rs. 128 million has allotted on 22 May , 2008. NDEP had stated that the share was over-subscribed by 66 times with total 85588000 shares worth Rs. 8.5588 billion. But the allotment process has been questioned against the fake use of citizenship number. The inspection of the issue of NDEP share was also questioned by SEBON to the entire collection centers and issue manager, ACE Development Bank. Investors are still unaware about the procedure how the share is allotted.
Click Here to Download the Allotment SheetSource: Jamb News Service
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6 different companies are in the process of issuing Rs. 86 million worth shares. After receiving permission from the Security Board of Nepal (SEBON), these companies are getting ready for the issuance. Rs. 81.91 million worth share is the preference share while Rs. 4 million valued share is the general ones. "Among the companies holding the SEBON's consent the preference share of United Finance with Rs. 7.5 million worth and 1:1 share, Royal Merchant Banking & Finance with Rs. 0.14 million worth 1:1 share, International Leasing & Finance with Rs. 50.40 million worth 1:3.5 share, and Annapurna Development Bank with Rs. 15 million worth 1:2.5 share are all set for the issuance" as stated in the press release of SEBON. Likewise, Kaski Finance and Shikhar Bittiya Sanstha are authorized to issue 0.2million general share each at the rate of Rs. 100 per share. According to the prevailing rule the sanctioned companies are to complete their issuance process within 2 months from the permission granted date. "If the companies fail to complete their issuance process within the prescribed time the organizations need to carry out all the issuance procedures over ones again" – says Neeraj Giri, the director of SEBON. For fiscal year 2064/65 Rs. 7.80 billion worth various securities are already issued. Whereas in the fiscal year 2063/64 altogether only Rs. 2.54 billion worth securities were issued. As per the new rule propelled by central head – NRB, all the bank and finance companies required to increase their capital. Preference share issuance is the path paved for meeting that requirement. The shares flooding in the secondary market is also backed by this obligation. Till date out of 37 companies issuing shares, 28 companies have issued preference share, 7 companies have issued general share and 2 companies have forwarded their bond
Source:
Jamb News Service
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ICFC Bittiya Sanstha Ltd. is issuing 1:3 right share from 10 June, 2008 to 14 July, 2008 (2065 Jestha 28 to 2065 Ashad 30). It is issuing 2248062 right share at the rate of Rs. 100 per share. For this purpose the company is having its book closure on 29 May , 2008 (2065 Jestha 16).
Source: Jamb News Service
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Securities Board of Nepal (Sebon) has approved issuance of 2,00,000-unit of initial public offerings of Kaski Finance at the face value of 100 per unit. Similarly, the board has also approved 50,40,000-unit and 15,00,000-unit of rights shares of International Leasing and Finance Co and Annapurna Development Bank, states a press release.
Source: THT
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Sahayogi Bikas Bank Ltd. (Bittiya Sanstha) has changed its name to "Sahayogi Bikas Bank Ltd".
Source:
Jamb News Service
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Source: Jamb News Service
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Source:
Ekantipur
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NIDC Capital Markets Ltd. (Bittiya Sanstha) has changed its name to "NIDC Capital Markets Limited". NIDC Capital Markets Ltd, (NCM) is the pioneer in merchant banking in Nepal. NCM has successfully handled the activities as a Market Maker, Issue Manager and Registrar to the Issue.
Source:
Jamb News Service
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